Q1 16 Results. April 2016

Transcription

1 Q1 16 Results April 2016

2 Safe harbor Safe Harbor statement under the Private Securities Litigation Reform Act of 1995: This presentation and the accompanying conference call contain forward-looking statements about our products, including our investments in products, technology and other key strategic areas, certain non-financial metrics, such as member growth and engagement, and our expected financial metrics such as revenue, adjusted EBITDA, non-gaap EPS, depreciation and amortization, stock-based compensation and fully-diluted weighted shares for the second quarter of 2016 and the full fiscal year The achievement of the matters covered by such forward-looking statements involves risks, uncertainties and assumptions. If any of these risks or uncertainties materialize or if any of the assumptions prove incorrect, the company s results could differ materially from the results expressed or implied by the forward-looking statements the company makes. The risks and uncertainties referred to above include - but are not limited to - our core value of putting members first, which may conflict with the short-term interests of the business; engagement of our members; the price volatility of our Class A common stock; general economic conditions; expectations regarding the return on our strategic investments; execution of our plans and strategies, including with respect to mobile products and features and expansion into new areas and businesses; security measures and the risk that they may not be sufficient to secure our member data adequately or that we are subject to attacks that degrade or deny the ability of members to access our solutions; expectations regarding our ability to timely and effectively scale and adapt existing technology and network infrastructure to ensure that our solutions are accessible at all times with short or no perceptible load times; our ability to maintain our rate of revenue growth and manage our expenses and investment plans; our ability to accurately track our key metrics internally; members and customers curtailing or ceasing to use our solutions; privacy, security and data transfer concerns, as well as changes in regulations, which could impact our ability to serve our members or curtail our monetization efforts; litigation and regulatory issues; increasing competition; our ability to manage our growth; our international operations; our ability to recruit and retain our employees; the application of U.S. and international tax laws on our tax structure and any changes to such tax laws; acquisitions we have made or may make in the future; and the dual class structure of our Class A common stock. Further information on these and other factors that could affect the company s financial results is included in filings it makes with the Securities and Exchange Commission from time to time, including the section entitled Risk Factors in the company s Annual Report on Form 10-K for the year ended December 31, 2015, and additional information will also be set forth in our Form 10-Q that will be filed for the quarter ended March 31, 2016, which should be read in conjunction with these financial results. These documents are or will be available on the SEC Filings section of the Investor Relations page of the company's website at All information provided in this presentation is as of April 28, 2016, and LinkedIn undertakes no duty to update this information. 2

3 LinkedIn value propositions Stay connected and informed Advance my career Work smarter 3

4 Member value metrics Q1 12 Q2 12 Q3 12 Q4 12 Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 Q2 14 Q3'14 Q4'14 Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 Q1 12 Q2 12 Q3 12 Q4 12 Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 Q1 12 Q2 12 Q3 12 Q4 12 Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 Members (mn) 1 Unique visiting members (mn) 2 Member page views (bn) 3 1 as of quarter end 2 monthly average during the quarter 3 total during the quarter 4

5 Revenue $862 $ % $ % $712 $643 $ % $534 $ % $188 $228 $252 $304 $325 $364 $393 $447 $473 80% 60% 40% 20% 0% Q1 12 Q2 12 Q3 12 Q4 12 Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 Q2 14 Q3'14 Q4'14 Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 Net revenue ($mn) % Y/Y 5

6 Adjusted EBITDA 1 $249 40% $208 $222 $179 30% $145 $151 $160 $163 $111 $117 20% $79 $83 $89 $93 $38 $50 $56 10% 0% Q1 12 Q2 12 Q3 12 Q4 12 Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 Adj EBITDA ($mn) % of revenue 1 Adjusted EBITDA is a Non-GAAP financial measure. For a reconciliation of Adjusted EBITDA to net income (loss) please see slide 7. The presentation of this financial information is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with US GAAP. 6

7 Non-GAAP adjusted EBITDA reconciliation 1 (In millions) Q1 12 Q2 12 Q3 12 Q4 12 Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 Q4 14 Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 GAAP net income (loss) $5 $3 $2 $12 $23 $4 ($3) $4 ($13) ($1) ($4) $3 ($42) ($68) ($47) ($8) ($45) Provision (benefit) for income taxes (26) (10) (24) (33) Other (income) expense, net (0) 1 (1) (0) 0 0 (0) (2) (1) (1) (0) Depreciation and amortization Stock-based compensation Adjusted EBITDA $38 $50 $56 $79 $83 $89 $93 $111 $117 $145 $151 $179 $160 $163 $208 $249 $222 1 Adjusted EBITDA is a Non-GAAP financial measure. The presentation of this financial information is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with US GAAP 2 As adjusted, refer to appendix, page 14 7

8 Guidance 1 Q FY 2016 Revenue $ $3,650 3,700 2 Adjusted EBITDA $ $985-1,005 Non-GAAP EPS $ $ All guidance figures are approximate values in millions except for non-gaap EPS 2 Q2 16 Adj EBITDA guidance assumes depreciation of ~$93m, amortization of ~$44m, stock-based comp of ~$150m & FY16 Adj EBITDA guidance assumes depreciation of ~$395m, amortization of ~$173m, and stock-based comp of ~$580m. 8

9 Appendix s 9

10 FY 2014 FY 2015 FY 2016 Full Year Q1'14 Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 FY13 FY14 FY15 COMPANY METRICS Members (MM) % y/y 36% 32% 28% 25% 23% 21% 20% 19% 19% 37% 25% 19% Unique Visiting Members (MM) % y/y 26% 13% 16% 23% 18% 16% 11% 7% 9% 38% 19% 13% Mobile Unique Visiting Members (MM) % y/y 73% 46% 45% 46% 38% 35% 30% 26% 25% 116% 51% 32% % of total unique visiting members 43% 45% 47% 49% 50% 52% 55% 57% 58% 36% 46% 54% Member Page Views (BN) % y/y 43% 22% 28% 34% 30% 37% 33% 26% 34% 63% 31% 31% REVENUE MIX BY PRODUCT Net Revenue ($MM) ,529 2,219 2,991 % y/y 46% 47% 45% 44% 35% 33% 37% 34% 35% 57% 45% 35% Talent Solutions ,328 1,877 % y/y 50% 49% 45% 41% 36% 38% 46% 45% 41% 67% 46% 41% Hiring ,328 1,770 % y/y 50% 49% 45% 41% 36% 32% 34% 32% 27% 67% 46% 33% Learning & Development % y/y n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a Marketing Solutions % y/y 33% 44% 45% 56% 38% 32% 28% 20% 29% 33% 46% 28% Premium Subscriptions % y/y 46% 44% 43% 38% 28% 22% 21% 19% 22% 61% 42% 22% Percent of Total: Talent Solutions 62% 60% 61% 57% 62% 62% 64% 62% 65% 60% 60% 63% Marketing Solutions 18% 20% 19% 24% 19% 20% 18% 21% 18% 20% 20% 19% Premium Subscriptions 20% 20% 20% 19% 19% 18% 18% 17% 17% 20% 20% 18% REVENUE MIX BY GEOGRAPHY Net Revenue ($MM) ,529 2,219 2,991 % y/y 46% 47% 45% 44% 35% 33% 37% 34% 35% 57% 45% 35% US ,334 1,846 % y/y 41% 42% 40% 43% 37% 40% 41% 36% 35% 52% 42% 38% EMEA % y/y 57% 59% 55% 50% 33% 25% 34% 34% 39% 65% 55% 32% APAC % y/y 61% 64% 60% 49% 40% 28% 32% 30% 32% 71% 58% 32% Other Americas % y/y 32% 32% 35% 24% 19% 12% 19% 19% 19% 66% 31% 17% Percent of Total: US 60% 60% 60% 60% 61% 62% 62% 61% 61% 62% 60% 62% International 40% 40% 40% 40% 39% 38% 38% 39% 39% 38% 40% 38% EMEA 25% 25% 25% 25% 25% 24% 24% 25% 25% 23% 25% 24% APAC 8% 9% 9% 8% 8% 8% 8% 8% 8% 8% 8% 8% Other Americas 7% 7% 6% 6% 6% 6% 6% 5% 5% 7% 6% 6%

11 FY 2014 FY 2015 FY 2016 Full Year Q1'14 Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 FY13 FY14 FY15 REVENUE MIX BY GEOGRAPHY, BY PRODUCT Net Revenue ($MM) ,529 2,219 2,991 % y/y 46% 47% 45% 44% 35% 33% 37% 34% 35% 57% 45% 35% US Revenue ,334 1,846 Talent Solutions ,157 % y/y 43% 41% 37% 36% 33% 40% 49% 48% 42% 58% 39% 43% Marketing Solutions % y/y 30% 44% 50% 72% 58% 55% 36% 21% 27% 30% 51% 39% Premium Subscriptions % y/y 47% 42% 39% 37% 28% 24% 23% 19% 22% 60% 41% 23% International Revenue ,145 Talent Solutions % y/y 63% 63% 59% 51% 40% 33% 41% 41% 39% 85% 58% 39% Marketing Solutions % y/y 37% 45% 36% 36% 13% 3% 14% 17% 34% 36% 38% 12% Premium Subscriptions % y/y 44% 47% 49% 39% 27% 19% 17% 18% 22% 62% 45% 20% REVENUE MIX BY CHANNEL Net Revenue ($MM) ,529 2,219 2,991 % y/y 46% 47% 45% 44% 35% 33% 37% 34% 35% 57% 45% 35% Field Sales ,350 1,865 % y/y 50% 52% 50% 53% 43% 38% 40% 33% 36% 61% 51% 38% Online Sales ,126 % y/y 41% 39% 37% 30% 23% 26% 32% 35% 33% 52% 36% 30% Percent of Total: Field Sales 58% 60% 60% 64% 62% 62% 62% 64% 62% 58% 61% 62% Online Sales 42% 40% 40% 36% 38% 38% 38% 36% 38% 42% 39% 38% GAAP P&L ($MM) Net revenue ,529 2,219 2,991 Cost of revenue Sales & marketing ,048 Product development General & administrative Depreciation & amortization Income (loss) from operations (1) (17) (81) (37) (16) (66) (151) Other income (expense), net (7) (15) (12) (21) (16) (12) 1 (5) (64) Provision (benefit) for income taxes (26) (10) (24) (33) (50) Net income (loss) (13) (1) (4) 3 (42) (68) (47) (8) (45) 27 (15) (165) Accretion of redeemable noncontrolling interest (0) (0) (0) (0) (0) (0) (1) (1) (1) (0) (1) Net income (loss) attributable to common stockholders (13) (1) (4) 3 (43) (68) (47) (8) (46) 27 (16) (166) Basic shares outstanding (MM) Diluted shares outstanding (MM) Basic GAAP EPS attributable to common stockholders ($0.11) ($0.01) ($0.03) $0.02 ($0.34) ($0.53) ($0.36) ($0.06) ($0.35) $0.24 ($0.13) ($1.29) Diluted GAAP EPS attributable to common stockholders ($0.11) ($0.01) ($0.03) $0.02 ($0.34) ($0.53) ($0.36) ($0.06) ($0.35) $0.23 ($0.13) ($1.29)

12 FY 2014 FY 2015 FY 2016 Full Year Q1'14 Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 FY13 FY14 FY15 GAAP TO NON-GAAP RECONCILIATIONS PRE-TAX RECONCILIATIONS ($MM) GAAP Cost of Revenue Stock-based compensation Non-GAAP Cost of Revenue % net revenue 12% 12% 12% 12% 12% 12% 13% 12% 12% 12% 12% 12% GAAP Sales & Marketing ,048 Stock-based compensation Non-GAAP Sales & Marketing % net revenue 33% 32% 32% 32% 33% 33% 31% 31% 32% 32% 32% 32% GAAP Product Development Stock-based compensation Non-GAAP Product Development % net revenue 18% 17% 17% 16% 18% 18% 19% 18% 19% 19% 17% 18% GAAP General & Administrative Stock-based compensation Non-GAAP General & Administrative % net revenue 12% 12% 12% 12% 11% 13% 12% 11% 11% 12% 12% 12% GAAP Income (Loss) from Operations (1) (17) (81) (37) (16) (66) (151) Stock-based compensation Amortization of intangible assets Non-GAAP Operating Income % margin 15% 18% 18% 19% 15% 13% 18% 19% 15% 17% 18% 17% Depreciation ADJUSTED EBITDA RECONCILIATION ($MM) GAAP Net Income (Loss) (13) (1) (4) 3 (42) (68) (47) (8) (45) 27 (15) (165) Provision (benefit) for income taxes (26) (10) (24) (33) (50) Other (income) expense, net (1) (1) (0) (1) 5 64 Depreciation & amortization Stock-based compensation Adjusted EBITDA % margin 25% 27% 27% 28% 25% 23% 27% 29% 26% 25% 27% 26% NON-GAAP PRE TAX INCOME AND TAX RATE RECONCILIATION ($MM) GAAP Pre-Tax Income (Loss) (32) (94) (57) (32) (78) (215) Stock-based compensation Non-cash interest expense related to convertible notes Amortization of intangible assets Add back: fair value adjustment on other derivative Non-GAAP Pre-Tax Income Provision (Benefit) for Income Taxes, GAAP (26) (10) (24) (33) (50) GAAP Income Tax Rate 5,184% 106% 148% 55% (33%) 28% 18% 75% 42% 46% 149% 23% Income tax effect of non-gaap adjustments (12) (18) (23) (38) (11) (47) (41) (62) (63) (45) (90) (161) Provision for Income Taxes, Non-GAAP Non-GAAP Income Tax Rate 35% 35% 35% 35% 23% 23% 23% 23% 23% 26% 35% 23%

13 FY 2014 FY 2015 FY 2016 Full Year Q1'14 Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 FY13 FY14 FY15 NON-GAAP NET INCOME RECONCILIATION ($MM) GAAP Net Income (Loss) Attributable to Common Stockholders (13) (1) (4) 3 (43) (68) (47) (8) (46) 27 (16) (166) Stock-based compensation Non-cash interest expense related to convertible notes Amortization of intangible assets Accretion of redeemable noncontrolling interest Fair value adjustment on other derivative Income tax effect of non-gaap adjustments (12) (18) (23) (38) (11) (47) (41) (62) (63) (45) (90) (161) Non-GAAP Net Income % margin 10% 12% 12% 12% 11% 10% 13% 15% 12% 13% 11% 12% NON-GAAP SHARE COUNT RECONCILIATION (MM) GAAP basic shares outstanding Non-GAAP basic shares outstanding GAAP diluted shares outstanding Dilutive shares under treasury stock method Non-GAAP diluted shares outstanding NON-GAAP EPS Basic Non-GAAP EPS $0.39 $0.52 $0.54 $0.62 $0.58 $0.56 $0.79 $0.96 $0.75 $1.69 $2.07 $2.89 Diluted Non-GAAP EPS $0.38 $0.51 $0.52 $0.61 $0.57 $0.55 $0.78 $0.94 $0.74 $1.61 $2.02 $2.84 BALANCE SHEET ($MM) Cash, cash equivalents & marketable securities 2,306 2,367 2,264 3,443 3,530 3,033 3,089 3,119 3,160 2,329 3,443 3,119 Property and equipment, net ,047 1, ,047 Working capital 2,078 2,134 2,026 3,239 3,342 2,740 2,771 2,747 2,762 2,113 3,239 2,747 Total assets 3,562 3,721 3,906 5,427 5,538 6,557 6,717 7,011 7,209 3,353 5,427 7,011 Total deferred revenue (short-term and long-term) Total stockholder's equity 2,761 2,875 2,995 3,325 3,416 4,193 4,292 4,469 4,612 2,629 3,325 4,469 CASH FLOW STATEMENT ($MM) Cash flows provided by operating activities Purchases of property and equipment Free Cash Flow (111) (1) Cash flows provided by (used in) investing activities (448) (33) (320) (1,493) 371 (799) (57) (307) (41) (1,358) (2,293) (792) Cash flows provided by financing activities , ,454 1, TOTAL HEADCOUNT Total Headcount 5,416 5,758 6,442 6,897 7,633 8,735 9,273 9,372 9,732 5,045 6,897 9,372 % y/y 43% 36% 34% 37% 41% 52% 44% 36% 27% 46% 37% 36%

14 LinkedIn Corporation and its subsidiaries, (the Company ), provides this supplement to assist investors in evaluating the Company s financial and operating metrics. The Company suggests that the notes to this supplement be read in conjunction with the financial tables. The Company intends to update the financial supplement on a quarterly basis. Non-GAAP Financial Measures To supplement its condensed consolidated financial statements, which are prepared and presented in accordance with US GAAP, the Company uses non-gaap financial measures: adjusted EBITDA, non-gaap net income, and non-gaap diluted EPS (collectively the non-gaap financial measures ). The presentation of this financial information is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with US GAAP. The Company uses these non-gaap financial measures for financial and operational decision making and as a means to evaluate period-to-period comparisons. The Company believes that they provide useful information about operating results, enhance the overall understanding of past financial performance and future prospects, and allow for greater transparency with respect to key metrics used by management in its financial and operational decision making. The Company excludes the following items from one or more of its non-gaap measures: Stock-based compensation. The Company excludes stock-based compensation because it is non-cash in nature and because the Company believes that the non-gaap financial measures excluding this item provide meaningful supplemental information regarding operational performance and liquidity. The Company further believes this measure is useful to investors in that it allows for greater transparency to certain line items in its financial statements and facilitates comparisons to peer operating results. Non-cash interest expense related to convertible senior notes. In November 2014, the Company issued $1.3 billion aggregate principal amount of 0.50% convertible senior notes. In accordance with GAAP, the Company separately accounted for the value of the conversion feature as a debt discount, which is amortized in a manner that reflects the Company s non-convertible debt borrowing rate. Accordingly, the Company recognizes imputed interest expense on its convertible senior notes of approximately 4.7% in its statement of operations. The Company excludes the difference between the imputed interest expense and coupon interest expense, net of any capitalized interest, because it is non-cash in nature and because the Company believes that the non-gaap financial measures excluding this item provide meaningful supplemental information regarding operational performance and liquidity. In addition, excluding this item from the non-gaap measures facilitates comparisons to historical operating results and comparisons to peer operating results. Amortization of acquired intangible assets. The Company excludes amortization of acquired intangible assets because it is non-cash in nature and because the Company believes that the non-gaap financial measures excluding this item provide meaningful supplemental information regarding operational performance and liquidity. In addition, excluding this item from the non-gaap measures facilitates comparisons to historical operating results and comparisons to peer operating results. Accretion of redeemable noncontrolling interest. The accretion of redeemable noncontrolling interest represents the accretion of the Company's redeemable noncontrolling interest to its redemption value. The Company excludes the accretion because it is non-cash in nature and because the Company believes that the non-gaap financial measures excluding this item provide meaningful supplemental information regarding operating performance. In addition, excluding this item from the non-gaap financial measures facilitates comparisons to historical operating results and comparisons to peer operating results. Fair value adjustment on other derivative. These adjustments represent the changes in fair value of the cash settlement feature for the preferred shares in the Company's joint venture. The Company excludes these fair value adjustments because they are non-cash in nature and the Company believes that the non-gaap financial measures excluding this item provide meaningful supplemental information regarding operating performance. In addition, excluding this item from the non-gaap financial measures facilitates comparisons to historical operating results and comparisons to peer operating results. Income tax effects and adjustments. The Company adjusts non-gaap net income by considering the income tax effects of excluding items such as stock-based compensation and the amortization of acquired intangible assets. Beginning in the first quarter of 2014, the Company has implemented a static non-gaap tax rate for evaluating its operating performance as well as for planning and forecasting purposes. This projected 10-year weighted average non-gaap tax rate eliminates the effects of non-recurring and period specific items, which can vary in size and frequency and does not necessarily reflect the company's long-term operations. Historically, the Company computed a non-gaap tax rate based on non-gaap pre-tax income on a quarterly basis. Based on the Company's current forecast, a tax rate of 23% has been applied to its non-gaap financial results for the current period. This rate will be adjusted annually, if necessary. The Company believes that adjusting for these income tax effects and adjustments provides additional transparency to the overall or after tax effects of excluding these items from its non-gaap net income. Dilutive shares under the treasury stock method. During periods with a net loss, the Company excluded certain potential common shares from its GAAP diluted shares because their effect would have been anti-dilutive. On a non-gaap basis, these shares would have been dilutive. As a result, the Company has included the impact of these shares in the calculation of its non-gaap diluted net income per share under the treasury stock method. For more information on the non-gaap financial measures, please see the GAAP to Non-GAAP Reconciliations in the table above. These reconciliations have more details on the US GAAP financial measures that are most directly comparable to non- GAAP financial measures and the related reconciliations between these financial measures.

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